S7-8. (Learning Objectives 3, 4: Computing partial year depreciation; selecting the best depreciation method) Assume that on September 30, 20X6, LoganAir, the national airline of Switzerland, purchased an Airbus aircraft at a cost of €48,000,000. LoganAir expects the plane to remain useful for six years (4,500,000 miles) and to have a residual value of

€6,000,000. LoganAir will fly the plane 420,000 miles during the remainder of 20X6.

Compute LoganAir’s depreciation on the plane for the year ended December 31, 20X6, using the following methods:

a. Straight-line

b. Units-of-production

c. Double-declining-balance Which method would produce the highest net income for 20X6? Which method produces the lowest net income?